Back on an F train commute, and ready to spew forth another time limited post.
Since I covered ethos last week, I want to touch briefly on tactics and vision in this one. Let’s revisit the fundamental question: can my business earn enough to free me from location dependence?
Let’s use Kevin Kelly’s 1000 True Fans math to see what modest success would look like, then work backward. Let’s set the quite modest goal of $1000 per month, which, to account for variability in the market, I’d boost to $1500. I currently have a $50 product for sale. Let’s say I’m earning $30 on that, after advertising and administrative costs (VA, web hosting, any cost I wouldn’t have to take on were I not running a business). To make that $1500 I’d have to sell 50 videos per month, or slightly more than one-a-day. For reasons I detailed in past posts, it’s extremely hard to get a handle on a stable conversion rate (percentage of people who see an ad who eventually buy, or, more usefully, eventual revenue that one dollar on advertising brings), that increases linearly as I increase ad spending. Instead the curve looks like an tilted parabola: the classic diminishing returns curve. Suspicion: the size of the market I’m hitting up on the platforms I’m advertising is fixed, and I have to wait for natural “churn”, as new drummers age into the target range, etc. One thing I’ll definitely do in a future business is try to get my head around the size of the market.
So while I employ methods to both increase conversion and increase traffic, I’m trying a Ten True Clients strategy in parallel. Ten True Clients is essentially ten people willing to give you $100 per month for Something. On that side I’m pitching a premium coaching course to existing customers. Fifteen “true clients” per month is another way to arrive at the target monthly min. With this course, the challenge will be making it valuable enough to command the pricetag while keeping it automated enough that I’m not just teaching private lessons by proxy.
I’ve got two pilot clients already, and my aim is to experiment with their services, continuing to add new clients, until I find the best leverage points. What’s the Venn diagram of most value to these folks with least Recurring time commitment to me. (I don’t mind spending a lot of time on a resource that will be self-sustaining once complete, for instance a lesson plan that lets students “choose their own adventure” based on how certain exercises “feel” to them, or, as a member of a mastermind suggested, a social network like LinkedIn, that would let students critique and learn from Each Other’s videos.) But first I need market intelligence, which means a small degree of virtual private teaching.
Not for nothing, I think this or next month might be the first 1K revenue month. I’m holding off publishing monthly earnings reports until them, as I’m hovering in the $100-300 profit/month range depending on ad spending. Releasing the last chapter of the series, optimizing the price point (maybe by adding some extra Evergreen features like lesson plans), and getting the coaching underway should see that number tick up. Again, the goal is Recurring 1k Profit, which is a very different beast from a good month of 1k Revenue.
Ok. Pulling into the station. See you soon!